A workforce management technique known as “forced ranking” evaluates and ranks workers’ performance in relation to one another rather than against a preset benchmark. Employee performance is measured on an individual basis rather than according to any standards. Another name for this technique is the vitality curve. Comprehensive annual assessments are used for measurement and grading.
Although this approach is very contentious in the management community, compulsory ranking should theoretically raise the caliber of the workforce.
Known as the “rank and yank” system, this approach gained popularity at General Electric in the 1980s. Every year, General Electric ranked its employees against one another, and the individuals who performed the worst were let go. Following Enron’s collapse, which was partially ascribed to coerced ranking systems, the approach lost its applicability.
Employees are categorized into three groups based on their success in the forced ranking system top performers, or “A” players, receive promotions and performance reviews. They make up the top 20%. Up to 70% of players are “B” players, meaning they don’t perform exceptionally well or poorly. They may be given appraisals and modest raises. Additionally, 10% of players that perform comparably poorly are “C” players. These workers are let go from the organization.
Many businesses use this ranking system even though they don’t openly acknowledge it. According to data, the force ranking methodology is used by at least 10% of the 500 Fortune corporations. Employees are graded according to different standards set by various organizations. An employee at General Electric, for instance, should perform well in four areas: their level of energy, how they can motivate others, their ability to make difficult decisions, and how successfully they carry out their plans.
Does force ranking work well or poorly?
Some contend that force ranking is an effective strategy because it enables the company to identify and reward high-performing workers with reviews, promotions, and training. Employers can hire better personnel to strengthen the company, while the worst employees can be helped to improve or fired completely.
- Even though this approach aims to increase the company’s efficiency, it may also lower morale and foster an unhealthy competitive environment. A lot of managers and HR specialists are voicing concerns about forced ranking. It has a poor reputation in the management area as a result.
Forced ranking benefits
Can eliminate nepotism: This approach can increase the value of the talent and lessen nepotism in the organization. - Acknowledges top performers: This approach aids in locating and rewarding the top performers.
- Systematizes the HR process: Monitoring employee performance in large organizations can be difficult. This approach provides a simple framework for evaluating employees.
- Increased profitability and productivity: Employee productivity may rise as a result of the rivalry.
- Clearly stating the requirements for the company’s success is beneficial.
The drawbacks of mandatory ranking
- Overcompetition: The employee comparison system may make the workplace too competitive.
- Loss of top talent: Top workers may quit out of fear of receiving a poor evaluation.
- partiality: Due to the subjective nature of the measurement, bias and partiality may result.
